Let's start by defining the differences between a Comparative Market Analysis (CMA) and an appraisal.
Appraisals are usually ordered by banks to determine if the exact value of the collateral (property) matches the money they are lending.
Appraisals follow closely the methodology used in a CMA: comparing similar properties that are for sale, those sold, and those that did not sell.
To arrive at value, appraisers add or subtract the value of features to the subject property, adjustments are always made to the subject property, not to the comparables.
Appraisers might also take into consideration the price of materials, using publications and special software.
In the state of Florida, brokers can make appraisals in non-federally related transactions.
Federal Housing Administration (FHA), and Veteran's Affairs (VA) loans are considered to be federally-related, because managed by federal agencies.
Both appraisers and brokers must adhere to Uniform Standards of Professional Appraisal Practice USPAP
The difference between our CMA and an appraisal, is that it takes into account full market trends.
How the environment is performing in terms of sales is very important to arrive at a fair market value
The other difference is that, while appraisals arrive at only one value, a CMA can offer a range of values, the seller has to decide within that range of value depending on how fast he wants to sell his porperty, the higher the price the less probability of netting a buyer fast.
After we agree with the seller on the price, the CMA is published to the listing website as a downloable pdf.
This is useful for the seller and the buyer: the buyer can be assured that he is paying a fair market price, and the seller that his listing is accurately placed in a price range for maximum speed of transaction completion.
We should note at this point the we do not accept to list a property if the seller does not agree with our CMA and has his own ideas about the price of his property.
We fully respect that, but sellers must understand that they should act dispassionately because buyers have no emotional attachment to his property.
A property that is overpriced not only will not sell, but will become "stale", meaning that it has stayed too long on the market and is therefore not desirable, this effect will persist even if the seller decides to lower the price later.
Moreover, an overpriced property will be competing in listing websites with other properties that are correctly positioned in their price range, so it will lose in the comparison.
Lastly, we cannot afford to invest in an advertising effort for a property that will not sell.
The present conditions of the real estate market do not allow for unrealistic overpricing.